DOING BUSINESSIN ITALY 2013

Smarter Regulations for

Small and Medium-sized Enterprises

Rome, Italy - November 14, 2012

Augusto Lopez-ClarosDirector, Global Indicators & Analysis

World Bank-IFC

Doing Business indicators reflect on some of the most important obstacles firms face

Based on Enterprise Surveys in 118 countries around the world

Direct responses from representative samples of the private sector

Access to finance, electricity, informality and tax rates are the top obstacles across the developing world

Percent of firms identifying the problem as the main obstacle to their business activity

Access to finance

Electricity

Informality

Tax rates

Political instability

Inadequately educated workforce

Corruption

Crime, theft and disorder

Customs and trade regulations

Transport

Access to land

Tax administration

Business licensing and permits

Labor regulations

Courts

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

15.8%

14.3%

11.1%

11.0%

7.9%

7.8%

6.7%

5.8%

3.3%

3.3%

3.1%

2.9%

2.8%

2.6%

0.9%

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The Doing Business indicators have a strong theoretical foundation

The Regulation of Entry: Countries that regulate entry more heavily have greater corruption and larger unofficial economies, but not better quality of public or private goods.

Private Credit in 129 Countries: Creditor protection through the legal system and information sharing institutions such as credit bureaus are associated with higher ratios of private credit to GDP. Credit rises after improvements in creditor rights and in information sharing.

Trading on Time: Each additional day that a product is delayed prior to being shipped reduces trade by more than one percent.

Courts: Procedural formalism is associated with higher expected duration of judicial proceedings, more corruption, less consistency, less honesty, less fairness in judicial decisions, and inferior access to justice

The Regulation of Labor: Heavier regulation of labor is associated with a larger unofficial economy, lower labor force participation, and higher unemployment, especially of the young

The Effect of Corporate Taxes on Investment and Entrepreneurship: The corporate tax rate has a large adverse impact on aggregate investment, FDI, and entrepreneurial activity. It is also correlated with investment in manufacturing as well as with the size of the informal economy.

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Doing Business indicators – 11 areas of business regulation (10 included in the DB2013 ranking)

covering 185 economies

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Start-up Expansion Operations Insolvency

Starting a business

Minimum capital requirement,

procedures, time and cost

Registering property

Procedures, time and cost

Getting credit

Credit information systems

Movable collateral laws

Protecting investors

Disclosure and liability in related party transactions

Enforcing contracts

Procedures, time and cost to resolve a commercial dispute

Dealing with construction permits

Procedures, time and cost

Paying taxes

Payments, time and Total Tax Rate

Trading across borders

Documents, time and cost

Getting electricity

Procedures, time and cost

Employing workers (annex)

Resolving insolvency

Time, cost and recovery rate

Property rightsInvestor protection

Access to creditEntry

Administrative burden Flexibility in hiring

Recovery rateReallocation of

assets

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The overall ease of doing business:

(1) Starting a business

(2) Dealing with construction permits

(3) Getting electricity

(4) Registering property

(5) Paying taxes

(6) Trading across borders

(7) Enforcing contracts

(8) Protecting investors

(9) Getting credit

(10) Resolving insolvency

Singapore

Top

ran

ked

co

un

trie

s in

DB

2013

Honk Kong SAR, China

New Zealand

1

2

3

Denmark5

United States4

Norway6

United Kingdom

Korea, Rep.

Georgia9

Australia10

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How does Doing Business measure a country’s ease of doing business?

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Economies that rank high on the ease of doing business tend to combine efficient regulatory

processes with strong legal institutions

OECD high-income economies have the most business-friendly regulatory environment on both dimensions

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Italy’s performance in Doing Business 2013

Italy, represented by Rome, ranks 73 out of 185 economies on the ease of doing business.

Since 2005 Italy has implemented a total of 14 institutional or regulatory reforms.

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Italy’s reforms improved variousregulatory processes since 2005

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What do Subnational reports add?

• Expand Doing Business indicators beyond the city measured by the annual report

• Include rules and regulations at all levels of government

• Capture local differences in regulations or enforcement

• Provide information on good practices within the same country that can be easily replicated

• Give specific locations an opportunity to tell their story

• Provide a tool for locations to compete with 185 economies

• Combine Doing Business media appeal with active participation of subnational governments in the reform process

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Subnational reports in over 50 countries

Government buy-in Broad coverage• 7 reports funded directly by

client governments

• 15 economies with 2nd or 3rd-round reports

• Over 50 economies included

• Over 350 cities covered

• BRICs + M included

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Milan

TurinBologna

Bari and the port of Taranto

Catanzaro and the port of Gioia Tauro

Padua

Palermo and the port of Catania

Rome

Naples and thePort of NaplesCagliari

and the port of Cagliari

Potenza

CampobassoL’Aquila

What does Doing Business in Italy 2013 cover?

Port of Trieste

Port of Genoa

4 indicators in 13 cities1. Starting a business

2. Dealing with construction permits

3. Registering property

4. Enforcing contracts

Trading across borders indicator in 7 ports

Data collected from 370 contributors is current as of June 2012

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No city outperforms the others in all areas

City Ease of starting a business

Ease of dealing with construction

permits

Ease of registering property

Ease of enforcing contracts

Bari, Apulia 6 9 7 13Bologna, Emilia-Romagna 4 1 1 11Cagliari, Sardinia 11 2 6 5Campobasso, Molise 13 8 3 5Catanzaro, Calabria 1 10 5 7L’Aquila, Abruzzo 9 3 9 8Milan, Lombardy 8 3 7 10Naples, Campania 12 11 3 2Padua, Veneto 2 5 12 12Palermo, Sicily 5 12 2 9Potenza, Basilicata 3 13 11 3Rome, Latium 7 6 13 4Turin, Piedmont 10 7 9 1

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Trading across borders

Gateway portsTransshipment and

regional ports

1 Genoa, Liguria 1 Catania, Sicily2 Trieste, Friuli Venezia Giulia 2 Taranto, Apulia3 Naples, Campania 3 Gioia Tauro, Calabria

4 Cagliari, Sardinia

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Registering property in Bologna, Naples or Palermo — faster than in Japan

15

h

Local building permits drive time and cost variations in Dealing with construction permits

Starting a business is fast but expensive

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It is faster to enforce a contract inTurin

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Exporting — slower than in the

average EU economy

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Italian cities can learn from each other

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DoingBusinessindicator

Best practices within ItalyItalian best

practices comparedinternationally(global rank)

Italy’s performancein DB2013,

represented by Rome (global rank)

Starting a business

6 proceduresBari, Bologna, Cagliari, Catanzaro, L’Aquila, Milan,Naples, Padua, Palermo, Potenza, Rome, Turin 78 846 days Milan, Padua, Rome

12.2% of income per capita Bari9.7% of income per capita minimum capital requirement All cities

Dealing with construction permits

11 procedures Cagliari, Rome

33 103151 days Milan

45.1% of income per capita Naples

Registering property

3 procedures Bologna, Milan, Naples, Palermo, Rome, Turin 26 3913 days Bologna, Naples, Palermo

4.3% of property value Catanzaro

Enforcing contracts

41 procedures All cities 123 160855 days Turin20.5% of claim value Potenza

Ease of doing business (Hypothetical city “Italiana”) 56 73

More new firms are registered after reforms making it easier to start a business

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Good business regulations and governance

In countries where business regulation is efficient and information on documentation requirements and fee schedules is easily accessible, the costs to start a business are much lower.

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Thank you. For more information:www.doingbusiness.org

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